Shares in Beach Energy jumped more than 13% today after Kerry Stokes’ Seven Group picked up a 13.79% holding in the Adelaide-based explorer.
The stake is part of Seven’s investment strategy to target high quality energy stocks.
The $178 million holding, which built on an earlier 5% acquisition, resides in Seven Group’s investment portfolio. The group’s interests include mining services company Westrac and Seven West Media.
Don Voelte, the CEO of Seven and a former chief of energy company Woodside, says: “We believe Beach Energy is well managed and has strong assets that are well-placed for increasing future energy demand. Seven Group Holdings’ investment in Beach Energy is consistent with its strategy of participating in high quality energy opportunities that will add shareholder value.”
Energy stocks have been hammered by investors with the price of oil falling by half in 2014.
On yesterday’s closing price of $1.01, which was up 5%, Beach has lost more than 28% of market value since the start of 2014. It hit a high of $1.80 mid 2014.
The oil and gas explorer recently announced it is cutting its capital spending by up to $55 million in response to plunging oil prices. The company reported a 17% drop in revenue to $194 million for the three months to the end of December.
Seven, led by former global oil and gas industry executive Voelte, recently bought energy explorer Nexus from its administrators. The group also has a stake in Woodside.
Beach energy shares jumped 13.86% to $1.15.
The Seven Group was up almost 3% to $5.36.
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